Non-Governmental Organizations (NGOs) play a crucial role in humanitarian aid, development, and emergency crisis response. However, their dependence on traditional Western funding sources, particularly from the Development Assistance Committee (DAC) countries, has exposed them to vulnerabilities—none more significant than the recent shifts in U.S. foreign aid policies, including the gutting of USAID funding.

The Trump administration’s drastic cuts to USAID have sent a wave of concern through NGOs globally, including Southeast Asia, many of which now face significant challenges in sustaining their operations without U.S. financial support.

In light of these realities, the need for a diversified donor base is not merely a strategic necessity but an ethical obligation to ensure that humanitarian efforts remain sustainable and apolitical.

Understanding DAC Member Countries

The Development Assistance Committee (DAC) is a forum of major donor countries under the Organization for Economic Co-operation and Development (OECD). Established in 1961, the DAC aims to coordinate international development aid efforts and set guidelines on what constitutes Official Development Assistance (ODA).

The member countries of the DAC include the United States, Canada, Australia, Japan, and most Western European nations such as the United Kingdom, Germany, France, and Sweden. These countries have historically been the primary sources of humanitarian and development funding worldwide, shaping global aid policies and priorities However, as geopolitical and economic landscapes evolve, NGOs must look beyond these traditional sources to sustain their humanitarian missions.

The geopolitical landscape in Western Europe has shifted significantly with the rise of populist radical right parties, which have exerted pressure on governments to reduce foreign aid expenditures. These parties have gained traction by prioritizing domestic issues such as immigration control, national security, and economic self-sufficiency over international development commitments. Consequently, foreign aid budgets in several European countries are facing cuts or restructuring, directly impacting the financial stability of NGOs that have long relied on DAC funding.

A recent example of this shift is Sweden, where the right-wing government sent shockwaves through the development community by announcing that at the end of 2024, it will terminate all its funding agreements with Swedish NGOs. This decision is particularly significant as Sweden has historically been one of the most generous donors in the DAC framework, with a strong commitment to international aid.

The move underscores a broader trend in which populist right-wing governments seek to redirect financial resources inward, prioritizing national concerns over global humanitarian obligations. As a result, NGOs that have long relied on Sweden’s extensive aid programs must now urgently seek alternative sources of funding to sustain their work.

The Problem with Ideological Rigidity

Many NGOs operate within a framework that aligns them with the political and ideological values of their primary donors, often Western nations and international institutions. This approach has led to an inherent bias in funding strategies, favoring traditional sources while disregarding emerging players in the global aid ecosystem.

The hesitation to engage with non-DAC countries such as China, India, Saudi Arabia, Taiwan, the UAE, and Qatar stems from ideological preconceptions about governance, human rights, and geopolitical influence. However, this reluctance undermines the core mission of NGOs—to serve affected populations irrespective of political considerations.

There are several reasons why NGOs have historically been reluctant to seek funding from non-DAC countries. One major factor is the perceived reputational risk. Many NGOs fear that accepting aid from countries like China, Saudi Arabia, or the UAE may subject them to scrutiny from Western stakeholders, including governments, institutional donors, and the media. Concerns about transparency, governance, and human rights records in non-DAC countries have reinforced hesitancy among NGOs to diversify their donor base.

Another reason is the established bureaucratic and operational alignment between NGOs and DAC donors. Over decades, NGOs have built deep institutional relationships with Western agencies, following specific guidelines, compliance mechanisms, and reporting structures. Shifting to new donors, particularly those with different expectations and strategic priorities, may require significant adjustments that some NGOs are unwilling or unable to make.

Additionally, ideological alignment plays a key role. Many NGOs have historically positioned themselves within the framework of Western liberal values, including democracy promotion, human rights advocacy, and governance reforms. Some non-DAC donors prioritize economic development and infrastructure over governance-related conditions, leading to a mismatch between the expectations of traditional NGO programming and the funding priorities of emerging donors.

However, clinging to these ideological constraints is no longer sustainable in a changing global order. The humanitarian imperative must take precedence over political preferences, ensuring that aid reaches those in need without unnecessary restrictions.

Emerging Non-DAC Humanitarian Donors

A clear example of the changing aid landscape is China’s recent intervention in Cambodia. With USAID funding cut off overnight, China stepped in with $4.4 million to help clear landmines, directly addressing a long-standing issue that continues to threaten civilian lives.

Similarly, China has provided substantial humanitarian assistance in response to natural disasters. Following the devastating 2015 Nepal earthquakes, China dispatched rescue teams, provided over $10 million in emergency aid, and assisted in rebuilding infrastructure, including schools and hospitals. China has also been a crucial aid partner for Pakistan, particularly in times of disaster relief. After the catastrophic 2022 floods in Pakistan, China donated more than $90 million in relief aid, including tents, food, and medical supplies, demonstrating its growing role in humanitarian assistance.

A key characteristic of non-DAC humanitarian funding is its predominantly bilateral nature.

Countries such as China, Saudi Arabia, the UAE, India, and Qatar typically provide aid on a state-to-state basis rather than engaging directly with NGOs. This approach has been particularly evident in Africa, Southeast Asia, and the Pacific, where non-DAC donors prefer to channel assistance through government-led initiatives rather than independent humanitarian organizations. The reluctance to fund NGOs directly stems from multiple factors, including a preference for government-to-government agreements, concerns over ensuring political alignment, and the desire to secure strategic diplomatic and economic benefits from aid agreements.

However, this dynamic may change in response to the drastic reductions in U.S. foreign aid funding. As traditional donors scale back their commitments, non-DAC countries may be compelled to rethink their engagement with NGOs to fill critical humanitarian gaps.

Already, there are indications that non-DAC donors are diversifying their aid mechanisms. For example, the UAE and Qatar have increased their collaboration with international organizations, while China has begun exploring partnerships with NGOs on targeted humanitarian projects. If this trend continues, NGOs will have an unprecedented opportunity to expand their funding sources beyond the DAC framework.

Pragmatism to Save Lives Must Take Precedence

The humanitarian sector must evolve to meet contemporary challenges. Ideological purity should not stand in the way of alleviating human suffering. By actively seeking funding from non-DAC countries, NGOs can safeguard their missions, expand their reach, and uphold their responsibility to serve affected communities.

Non-DAC donors can play a pivotal role in sustaining humanitarian work and now more than ever, pragmatism must take precedence over outdated funding models to build a truly global and resilient humanitarian aid system.